Companies Act 2006

853 Minor definitions

(1) The following provisions apply for the purposes of this Part.

(2) References to profit or losses of any description—

(a) are to profits or losses of that description made at any time, and

(b) except where the context otherwise requires, are to profits or losses of a revenue or capital character.

(3) “Capitalisation”, in relation to a company’s profits, means any of the following operations (whenever carried out)—

(a) applying the profits in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid bonus shares, or

(b) transferring the profits to capital redemption reserve.

(4) References to “realised profits” and “realised losses”, in relation to a company’s accounts, are to such profits or losses of the company as fall to be treated as realised in accordance with principles generally accepted at the time when the accounts are prepared, with respect to the determination for accounting purposes of realised profits or losses.

(5) Subsection (4) is without prejudice to—

(a) the construction of any other expression (where appropriate) by reference to accepted accounting principles or practice, or

(b) any specific provision for the treatment of profits or losses of any description as realised.

(6) “Fixed assets” means assets of a company which are intended for use on a continuing basis in the company’s activities.